Dear Friends,
Two days ago, Enforcement Officers from the PF office in Coimbatore came to our organization and stated that based on the judgment given in August 2004, referring to SCA No. 5666/2004 dated July 26, 2004, between Gujarat Cypromet and Assistant PF Commissioner, all organizations should include all allowances except HRA for PF calculation. Until now, PF contributions have only been deducted from the Basic salary. They are also insisting that we pay arrears from April 2004. Has anyone else encountered this situation? Can you please provide me with feedback on this?
Regards,
JR Kumar
From India, Coimbatore
4Two days ago, Enforcement Officers from the PF office in Coimbatore came to our organization and stated that based on the judgment given in August 2004, referring to SCA No. 5666/2004 dated July 26, 2004, between Gujarat Cypromet and Assistant PF Commissioner, all organizations should include all allowances except HRA for PF calculation. Until now, PF contributions have only been deducted from the Basic salary. They are also insisting that we pay arrears from April 2004. Has anyone else encountered this situation? Can you please provide me with feedback on this?
Regards,
JR Kumar
From India, Coimbatore
Dear Mr.Kumar I am surprised to hear on this.... ! Let me findout. Can any other member especially from Gujrat & nearby can help. Bye :)
From India, Madras
From India, Madras
Hey, it's very shocking to hear this. There have been no such changes encountered here in Chennai. Why can't you check with some other similar industry people or with PF consultants there?
Our friends have to reply to this.
From United States, Lincolnshire
Our friends have to reply to this.
From United States, Lincolnshire
Hey Friends,
It's indeed surprising news. Just a few days ago, when new PF forms were filled out for my organization, I did not receive any communication from the PF office. We need to check on this. Kumar, you need to inquire directly with the PF office. Here in Chennai, no such notice has been given.
Regards,
Poonam
From India, Madras
It's indeed surprising news. Just a few days ago, when new PF forms were filled out for my organization, I did not receive any communication from the PF office. We need to check on this. Kumar, you need to inquire directly with the PF office. Here in Chennai, no such notice has been given.
Regards,
Poonam
From India, Madras
Hi Guys,
It's really shocking news for me that the TN PF officers are asking this. I am from Maharashtra, working in HR for the last 3 years. As per my knowledge, there have been no amendments regarding the calculation of PF, except on basic and DA (if applicable). It also requires many official gazettes to be approved before the policy would commence. If the policy had been implemented, many unions would have resisted and it would have been published nationwide rather than just within the city.
The Provident Fund Act 1952 and other amendments do not mention any new changes. The last amendment was in Nov 1995 as the Provident Fund Act 1996. Therefore, you can oppose the request. If the officials cause problems, you can go to the state tribunal for solutions through your company's legal advisor.
We have around 6000 employees spread across Mumbai, Pune, and Nashik. We are calculating and submitting the PF returns based on employees' basic and basic arrears only.
Perhaps they are looking for contributions from your company. :roll:
From India, Pune
It's really shocking news for me that the TN PF officers are asking this. I am from Maharashtra, working in HR for the last 3 years. As per my knowledge, there have been no amendments regarding the calculation of PF, except on basic and DA (if applicable). It also requires many official gazettes to be approved before the policy would commence. If the policy had been implemented, many unions would have resisted and it would have been published nationwide rather than just within the city.
The Provident Fund Act 1952 and other amendments do not mention any new changes. The last amendment was in Nov 1995 as the Provident Fund Act 1996. Therefore, you can oppose the request. If the officials cause problems, you can go to the state tribunal for solutions through your company's legal advisor.
We have around 6000 employees spread across Mumbai, Pune, and Nashik. We are calculating and submitting the PF returns based on employees' basic and basic arrears only.
Perhaps they are looking for contributions from your company. :roll:
From India, Pune
Dear Kumar,
I very well understand your piquant situation..
Checking the laws reproduced below :
Employer
Coverage
Establishments employing 20 or more persons and engaged in any of the 180 industries / Classes of Businesses specified.
Co-operative Societies, employing 50 or more persons & working without the aid of power.
Establishments not coverable statutorily can come under the coverage of the Act statutorily.
An establishment continues to be covered under the Act, irrespective of the fall in the employment strength.
Since the Act applies on its own force to the establishments, the employers are required to file the particulars in the specified format for registration and allotment of business number.
Financial Obligations:
Contributions:
Statutory rate of contribution is 12% of emoluments (basic wages, dearness allowance, cash value of food concession and retaining allowances if any,) in the case of 175 establishments.
Rate of contribution shall be 10% in the case of the following:
Brick, beedi, jute, guar gum factories, coir industry other than spinning sector.
Establishments declared as sick undertakings by BIFR.
A matching contribution is to be collected from the emoluments of the employees.
Out of 12% (or 10% as the case may be) of the employer�s share of contribution, 8.33% is to be remitted towards pension fund.
Employer is also required to pay a contribution of 0.5% of the emoluments towards EDLIS�1976.
Administrative Charges:
An employer is required to pay administrative charges at 1.10% of emoluments towards provident fund charges and 0.01% towards EDLI Scheme 1976.
No separate administrative charges for pension scheme
Inspection Charges:
In respect of exempted establishment under P.F. Scheme employer is liable to pay only inspection charges at the rate of 0.18% of emoluments.
In the case of establishment exempted from EDLI Scheme, the employer is required to pay only inspection charges at the rate of 0.005% of emoluments.
Interest Liability:
For belated remittances of contributions, administrative / inspection charges interest at the rate of 12% on such remittances for the period of delay is to be remitted.
Damages:-
For all the belated remittances of contribution and administration/inspection charges damages are also payable as penalty ranging from 17% to 37% p.a. depending upon delay.
Duties of Employer
Enrol all categories of employees including the employees engaged by or through contractors and also piece rated, hourly rated employees.
Remit the contributions and administrative charges before the 15th of the following month.
File the initial returns of Form 9, Form 3(P.S.), form 5A.
File the monthly returns in Form 12A, Form 5, Form 10 and Challans for remitting the dues.
Maintain the contribution card in respect of each employee in Form 3A and submit the annual returns in Form 3A and 6A after reconciliation with Challans and form 12A.
The employer has to ensure that statutory dues in respect of contractors employees are remitted and returns filed.
Employer should attest the form No.2 and the claims forms submitted by the member/ legal heirs/ nominees.
Make available all relevant records for inspection of visiting officials with due authorisation.
Exemptions under the Schemes
Provident Fund
An individual member getting Provident Fund benefits on par with or better than statutory provisions can apply for exemption in Form 1 under para 27.
Employers can apply for exemption in respect of a class of employees getting similar or better benefits than the statutory P.F. Scheme under P. 27A subject to the conditons governing grant of exemption.
The employer can seek exemption from P.F. Scheme for the entire establishment if the majority of the employees also consent for exemption, subject to certain conditions governing grant of exemption and certain formalities.
Pension Scheme
Employer can avail exemption for the establishment as a whole, with the consent of majority of employees, if an alternative pension scheme is formulated by the establishment with benefits either on par with or superior to the EPS �95 and subject to certification of the viability and long sustenance of the scheme by an independent qualified actuary and satisfying the other conditions prescribed governing the grant of exemptions.
There is no provision for exemption of individuals or for class of employees.
EDLI Scheme
The establishment can get exemption from the EDLI Scheme, if the employees therein are entitled for a benefit in the nature of insurance whether linked to their P.F. deposit or not and without paying any contributions.
Its very clear that 12% is deducted on allowances other than exempted ones like Conveyance Rs 800/m , Child allowance Rs 200/m for two children,Medical allowance Rs 15,000/ per annum & LTA.
Don't panic..what you do is calculate the cost or impact of the same and negogiate with them for the payment.
Ask for the copy for the judgement as they have claimed..couldn't find it..and let me know as i would put you across the right people in this field.
Regards,
Rajat
From India, Pune
I very well understand your piquant situation..
Checking the laws reproduced below :
Employer
Coverage
Establishments employing 20 or more persons and engaged in any of the 180 industries / Classes of Businesses specified.
Co-operative Societies, employing 50 or more persons & working without the aid of power.
Establishments not coverable statutorily can come under the coverage of the Act statutorily.
An establishment continues to be covered under the Act, irrespective of the fall in the employment strength.
Since the Act applies on its own force to the establishments, the employers are required to file the particulars in the specified format for registration and allotment of business number.
Financial Obligations:
Contributions:
Statutory rate of contribution is 12% of emoluments (basic wages, dearness allowance, cash value of food concession and retaining allowances if any,) in the case of 175 establishments.
Rate of contribution shall be 10% in the case of the following:
Brick, beedi, jute, guar gum factories, coir industry other than spinning sector.
Establishments declared as sick undertakings by BIFR.
A matching contribution is to be collected from the emoluments of the employees.
Out of 12% (or 10% as the case may be) of the employer�s share of contribution, 8.33% is to be remitted towards pension fund.
Employer is also required to pay a contribution of 0.5% of the emoluments towards EDLIS�1976.
Administrative Charges:
An employer is required to pay administrative charges at 1.10% of emoluments towards provident fund charges and 0.01% towards EDLI Scheme 1976.
No separate administrative charges for pension scheme
Inspection Charges:
In respect of exempted establishment under P.F. Scheme employer is liable to pay only inspection charges at the rate of 0.18% of emoluments.
In the case of establishment exempted from EDLI Scheme, the employer is required to pay only inspection charges at the rate of 0.005% of emoluments.
Interest Liability:
For belated remittances of contributions, administrative / inspection charges interest at the rate of 12% on such remittances for the period of delay is to be remitted.
Damages:-
For all the belated remittances of contribution and administration/inspection charges damages are also payable as penalty ranging from 17% to 37% p.a. depending upon delay.
Duties of Employer
Enrol all categories of employees including the employees engaged by or through contractors and also piece rated, hourly rated employees.
Remit the contributions and administrative charges before the 15th of the following month.
File the initial returns of Form 9, Form 3(P.S.), form 5A.
File the monthly returns in Form 12A, Form 5, Form 10 and Challans for remitting the dues.
Maintain the contribution card in respect of each employee in Form 3A and submit the annual returns in Form 3A and 6A after reconciliation with Challans and form 12A.
The employer has to ensure that statutory dues in respect of contractors employees are remitted and returns filed.
Employer should attest the form No.2 and the claims forms submitted by the member/ legal heirs/ nominees.
Make available all relevant records for inspection of visiting officials with due authorisation.
Exemptions under the Schemes
Provident Fund
An individual member getting Provident Fund benefits on par with or better than statutory provisions can apply for exemption in Form 1 under para 27.
Employers can apply for exemption in respect of a class of employees getting similar or better benefits than the statutory P.F. Scheme under P. 27A subject to the conditons governing grant of exemption.
The employer can seek exemption from P.F. Scheme for the entire establishment if the majority of the employees also consent for exemption, subject to certain conditions governing grant of exemption and certain formalities.
Pension Scheme
Employer can avail exemption for the establishment as a whole, with the consent of majority of employees, if an alternative pension scheme is formulated by the establishment with benefits either on par with or superior to the EPS �95 and subject to certification of the viability and long sustenance of the scheme by an independent qualified actuary and satisfying the other conditions prescribed governing the grant of exemptions.
There is no provision for exemption of individuals or for class of employees.
EDLI Scheme
The establishment can get exemption from the EDLI Scheme, if the employees therein are entitled for a benefit in the nature of insurance whether linked to their P.F. deposit or not and without paying any contributions.
Its very clear that 12% is deducted on allowances other than exempted ones like Conveyance Rs 800/m , Child allowance Rs 200/m for two children,Medical allowance Rs 15,000/ per annum & LTA.
Don't panic..what you do is calculate the cost or impact of the same and negogiate with them for the payment.
Ask for the copy for the judgement as they have claimed..couldn't find it..and let me know as i would put you across the right people in this field.
Regards,
Rajat
From India, Pune
Hi Friends,
Thanks for your feedback. Few of our PF consultants have informed us that PF has been reaching out to all organizations for the past 2 weeks. Here in Coimbatore, a PF commissioner has been recently appointed, and he is trying to introduce this notification. We have been informed by the PF Inspectors. I don't know how the other organizations are going to react. These PF inspectors are also facing difficulty in informing the same to the employers, I hope so. Any feedback from you guys?
Regards,
JR Kumar
From India, Coimbatore
Thanks for your feedback. Few of our PF consultants have informed us that PF has been reaching out to all organizations for the past 2 weeks. Here in Coimbatore, a PF commissioner has been recently appointed, and he is trying to introduce this notification. We have been informed by the PF Inspectors. I don't know how the other organizations are going to react. These PF inspectors are also facing difficulty in informing the same to the employers, I hope so. Any feedback from you guys?
Regards,
JR Kumar
From India, Coimbatore
Hi,
I think it's surprising news to everyone. I would like to suggest you check the authenticity of this paper that you received. If there are any amendments in PF rules/regulations or changes, copies must be sent to every employer, or a press release should be made by the PF office.
First, check with the PF higher authorities about this amendment. Send a written communication about all that happened to you, along with a copy of the letter. Send a copy to all commissioners (top level of the state).
Meet with your company advocate to check on this case (Judgment given in August 2004, refer SCA No 5666/2004 dated July 26, 2004, between Gujarat Cypromet and Assistant PF Commissioner) and its related issues. It may not be applicable to all companies or may be specific to that case only.
Please correspond on all these issues in writing.
I think the amendment may be applicable for this case only. If it applies to every company, the PF office should give an official announcement in the newspaper or a draft to all companies within India.
If I find anything more interesting on this topic, I will forward it to you.
Thanks,
Shravan
From United Kingdom, London
I think it's surprising news to everyone. I would like to suggest you check the authenticity of this paper that you received. If there are any amendments in PF rules/regulations or changes, copies must be sent to every employer, or a press release should be made by the PF office.
First, check with the PF higher authorities about this amendment. Send a written communication about all that happened to you, along with a copy of the letter. Send a copy to all commissioners (top level of the state).
Meet with your company advocate to check on this case (Judgment given in August 2004, refer SCA No 5666/2004 dated July 26, 2004, between Gujarat Cypromet and Assistant PF Commissioner) and its related issues. It may not be applicable to all companies or may be specific to that case only.
Please correspond on all these issues in writing.
I think the amendment may be applicable for this case only. If it applies to every company, the PF office should give an official announcement in the newspaper or a draft to all companies within India.
If I find anything more interesting on this topic, I will forward it to you.
Thanks,
Shravan
From United Kingdom, London
HI Friends Did any of you got feedback on this iclusive of all allownce for PF contribution except HRA....Kindly give us your feedback
From India, Coimbatore
From India, Coimbatore
Hi Kumar,
As I mentioned in my earlier post, there have been no amendments to PF contributions. After posting, I confirmed with my PF consultant regarding the communication of SCA No. 5666/2004, but no information was provided. Typically, any amendments or changes in PF calculations are communicated to all employers, as was the case in November 1995, and a press release would have been issued.
Following Rajat's post, I learned and confirmed with my manager that EDLI is indeed in place. This scheme is optional, where all allowances are included in calculating the monthly premium payable for each employee. It is not mandatory.
I suggest reaching out to the State Tribunal of the Provident Fund in Chennai for clarification. Alternatively, contacting Gujarat Sypromat Co. for clear communication could also be beneficial. This company is in the production industry where the insurance (EDLI) scheme is required.
Thank you.
From India, Pune
As I mentioned in my earlier post, there have been no amendments to PF contributions. After posting, I confirmed with my PF consultant regarding the communication of SCA No. 5666/2004, but no information was provided. Typically, any amendments or changes in PF calculations are communicated to all employers, as was the case in November 1995, and a press release would have been issued.
Following Rajat's post, I learned and confirmed with my manager that EDLI is indeed in place. This scheme is optional, where all allowances are included in calculating the monthly premium payable for each employee. It is not mandatory.
I suggest reaching out to the State Tribunal of the Provident Fund in Chennai for clarification. Alternatively, contacting Gujarat Sypromat Co. for clear communication could also be beneficial. This company is in the production industry where the insurance (EDLI) scheme is required.
Thank you.
From India, Pune
Hi all As per my knowledge, no such change has been introduced for PF calculation even in Gujarat. So, check it out. Ekta
From India, Ahmadabad
From India, Ahmadabad
Hi Kumar,
It's all a game of enforcement officers because, to my knowledge and based on inquiries with my friends, PF only includes Basic + Dearness Allowance. They mentioned to me that they either lack understanding about PF or are attempting to take advantage of something.
Murali
9448337619
It's all a game of enforcement officers because, to my knowledge and based on inquiries with my friends, PF only includes Basic + Dearness Allowance. They mentioned to me that they either lack understanding about PF or are attempting to take advantage of something.
Murali
9448337619
The same problem was encountered in Chennai. One of the enforcement officers referred to the same case, asking us to pay the difference amount. He also insisted that we pay the basic @ 60% of gross. Please let me know if there is a rule that the basic should be 60% of the gross. I am trying to obtain the Gujarat High Court judgement regarding the coverage of allowance excluding HRA. If anyone can help, it will be greatly appreciated. The case is between Gujarat Cypromet Limited and Gujarat High Court.
Hi friends,
As mentioned earlier, there is a judgment regarding PF contributions. Excluding HRA, all other allowances have to be included in the contribution. This also impacts the Chennai region, and as of now, it has not been published through the proper channel. The enforcement officer from Chennai has also confirmed the same.
Regards, Ram
From India, Madras
As mentioned earlier, there is a judgment regarding PF contributions. Excluding HRA, all other allowances have to be included in the contribution. This also impacts the Chennai region, and as of now, it has not been published through the proper channel. The enforcement officer from Chennai has also confirmed the same.
Regards, Ram
From India, Madras
Looking for something specific? - Join & Be Part Of Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.
Legal Clarification on Termination for Criminal Case & PF Contribution Reduction.pdf
PF Judgement - SC - Trainee - 2006.doc